Since the start of 2021, price transparency has been an expected way of life for providers. Hospitals have been required to provide single machine-readable digital files containing standard charges for all items and services delivered by the hospital, including gross charges, discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges.
In addition, providers must display at least 300 “shoppable services” (or as many as the hospital provides if less than 300) that a healthcare consumer can schedule in advance. Descriptions also must contain plain language explanations of the services and be grouped with ancillary services.
Many healthcare providers have viewed these requirements as a regulated requirement, or they simply work to comply with the standards to avoid penalties. However, despite the extensive regulatory efforts to comply, some forward-looking healthcare providers could leverage this time of price transparency as a new opportunity for optimized patient engagement as well as a competitive advantage for the organization. Let’s explore more why price transparency efforts could be a game changer for some enterprising providers.
A Time of Consumerism
Healthcare consumerism has been impacting providers for the better part of the past decade. Today’s consumer is accustomed to digital tools and platforms that remove friction in purchasing goods and services. They expect this same experience in their healthcare services.
For example, take the process of getting a haircut. In 2010, most Americans would call to schedule an appointment with their barber or salon. Today, many would choose one who provides online scheduling and may not even select one who doesn’t offer that option. Consumers expect seamless convenience when seeking services, and technology has made that a mainstay in our lives. They expect that same experience in their healthcare as well.
The healthcare ecosystem, however, has a long-standing stigma associated with being a laggard in technology innovation adoption. That stigma may be the result of challenges related to protecting vast amounts of healthcare data and concerns of security related to newly implemented digital experiences, or a potential lack of resources to digitally innovate and implement within organizations. Either way, healthcare providers must understand how to overcome it to meet patient preferences and needs. COVID-19 forced consumers and providers to leverage technology in the absence of in-person interaction and has allowed healthcare to catapult forward in its use of technology. This creates an opportunity for competitive advantage in the market.
However, while technology can reduce friction and streamline the buyer experience, some consumers look at the enhanced digital experience as a possible added cost to them, or they want to see the true value in the service experience. This is particularly of concern to those who are covered by a high-deductible plan.
According to the Kaiser Family Foundation, the average annual deductible for a family in 2021 was $5,217. Additionally, as the data in the chart below illustrates, more and more Americans are covered by high-deductible plans. Simply put, as more people are covered by high-deductible health plans and the deductible continues to trend upwards, American families are going to be much more engaged in the price and value received for services.
Transparency as a Competitive Advantage
Some providers may view this confluence of consumerism, high-deductible plans and transparency compliance as a headwind. However, three key areas could be used to create a competitive advantage for many healthcare organizations in a crowded marketplace of care options. Now is the time for healthcare providers to lean into digital experiences and offerings to meet patients where they are. And while strategy and systems implementation may seem daunting, making that effort and investment now in digitizing transparency could serve as a competitive advantage.
To get healthcare organizations started on a digital transparency journey, consider the following basic questions:
- Is the organization providing an experience in which patients can schedule their appointment through a mobile app, access care details and get an instant idea of the out-of-pocket cost they would be responsible for and the services they are scheduling?
- During a virtual appointment discussing care options, can patients get a list of potential options, pricing and care availability?
- When making a payment, is the experience easy for the patient and are frictionless options for payment provided?
In addition, consumers covered by high-deductible plans are generally commercially insured, an important demographic for many providers. Therefore, engaging with patients’ wants and needs is critical, too, for financial success and sustainability.
While price transparency compliance is an added complexity for many organizations to take on, the opportunity of improved patient engagement, addressing consumerism preferences, and providing added value to cost-conscious and tech-savvy patients outweighs the regulatory burdens of this new price transparency rule.
Price transparency can be the impetus for a stronger competitive advantage in the marketplace. In the end, it is not just a compliance effort; it is also an opportunity to compete with other healthcare organizations locally, nationally and digitally. Patients require a frictionless experience with the services they buy, including healthcare. Failure to embrace this could mean missed opportunities for growth and lost patients for some providers.
Rick Kes is health care senior analyst, RSM US LLP.